News Story

COVID cash grew government in Michigan

Government jobs accounted for 32% of job growth in 2023

The Biden administration promoted its American Rescue Plan in 2021 as “delivering direct relief to the American people, rescuing the American economy, and starting to beat the virus.”

Governments across Michigan and the United States received millions of dollars from the federal government. In 2023, government jobs accounted for an estimated 32% of job growth in Michigan, which a University of Michigan forecast attributes to the COVID stimulus package.

In 2020, by comparison, 32% of Michigan business owners surveyed said they experienced a government-mandated closure. Michigan was a nation-leading state in that regard.

“The recovery in government employment is likely supported by funding that is still working its way through state and local governments from the American Rescue Plan Act of 2021, which will fade over time as a source of support,” the University of Michigan’s Michigan Economic Outlook report for 2023 to 2025 concluded. The report was published in November 2023.

The forecast had predicted 1,700 new government jobs in Michigan in 2023. Instead, there were 21,000 new jobs, 12.3 times the estimate.

The forecast expects government jobs to continue growing in Michigan: 7,900 jobs in 2024 and another 3,600 in 2025.

Even so, government jobs are headed down below historical averages, the forecast says.

“Despite the growth we are forecasting, government employment accounts for just 13.8 percent of the statewide total in 2025,” the report reads. “For comparison, government’s share of statewide employment has averaged 15.5 percent since 1956 and 14.8 percent since 2000.”

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.